Why IT does--and does not--matter

A singular event in May churned the information technology community, and the ripples continue to spread outwards to its distant shores.

The Harvard Business Review that month published an article by Nicholas G. Carr with the title, "IT Doesn't Matter." Carr posited that some parts of information technology are destined to go the way of electricity and locomotives. He wasn't really breaking any news, but he was caught writing down what many knew in their hearts to be true but didn't dare say aloud.

The article was like a blow landing on a bruise. The IT community, wracked by a historic economic downturn (recession? depression? correction?), did not suffer Carr's insights in silence. Almost immediately, the protests began. A blizzard of buzz began creating deep drifts of denials and dodges, trying to obscure the truth of his thesis.

Simply put, Carr wrote that IT is no longer a monolithic business function. Almost thirty years down the road, IT could finally be parsed into distinct functions that create a strategic competitive advantage--or not--but are still critical.

Shocking, eh?

Most of Carr's vociferous critics either only read the article's headline or conveniently neglected to mention that he also described how, sometimes, IT can create competitive advantages. In fact, he detailed the dramatic competitive advantages achieved by United Airlines, Federal Express, Mobile Oil, eBay, Reuters, Wal-Mart Stores and Dell. But his point is that these companies are the exception rather than the rule. Few companies are ingenious enough to sharpen IT to a corporate competitive edge. Instead, most companies are simply supplying the necessary equivalent of data as a utility, or "datatricity," to millions of information workers.

And this is a good thing.

Much to the delight of the shareholders of Microsoft, Cisco Systems, Intel and Oracle, IT has become a ubiquitous and critical service. Today, datatricity is simply the price of admission to most of our contests of capitalism. For a brief and fleeting moment, the benefit of word processing may have given a company a new way to win, but now it is simply the way documents are done. Microsoft Word isn't the IT engine behind Federal Express' package-tracking system. And so forth.

Today, IT departments are consumed by the chore of keeping the datatricity flowing. The millions of personal computers in service today are simply a necessary evil. Quite evil, in fact. Either because we didn't think far enough ahead, or because we simply weren't smart enough when we were inventing this infrastructure, we've ended up with an interlocking system of networked personal computers that are accidents waiting to happen. They must be constantly patched. They must be constantly resurrected from the "blue screen of death." And the networks they are attached to were never designed to really handle sophisticated and simple concepts like commerce, security or privacy.

And we're in denial about it. In 211 B.C., the Romans felt secure because they believed Hannibal could never cross the Alps, much less during the dead of winter. Their heirs in 2003 find cold comfort in their hope that a 16-year-old sipping his cappuccino at Starbucks won't exploit RPC 135 and sack their corporate data treasury. Which leads us to another issue.

It is shameful that so many people have to know what RPC 135 is, much less how to protect it from the modern day Carthaginian army made up of teenagers with too much time on their hands and too little respect for others. Yet this is what it's come to. Thousands upon thousands of highly skilled, dedicated IT professionals spend 150 percent of their workweek playing whack-a-mole without even the slightest chance of winning.

Meanwhile, in their copious free time, they are helping out colleagues staring at frozen computers or accelerating implementation of an enterprise resource planning system so their company can run more efficiently.

The irresistible gravity of capitalism is beginning to pull down the temples built to the gods of IT.

Once upon a time, textile mills were located along rivers that would turn the waterwheels that turned the looms. (In an instance filled with infinite irony, the long-lost-but-once-heroic Digital Equipment was headquartered in just such a mill.) Today, the turbines of industry are turned by the information created on personal computers and passed along the network that winds its way throughout the world of commerce. But businesses are still building mills on the river banks of information.

And some companies are beginning to say, "Enough."

The irresistible gravity of capitalism is beginning to pull down the temples built to the gods of IT. The baptistery has been spilled out, and grass is growing in the nave. Good business sense is beginning to look at IT as a simple "make, buy or lease" decision rather than a complex staffing requirement. CFOs, and even some CIOs, understand there simply isn't a competitive upside to having a legion of engineers figuring out how to patch 4,000 computers with MS03-039, but there is considerable downside if they don't.

Good technology combined with a good idea can be a force multiplier and create economies of scale. For example, once a critical patch has been issued and IT engineers have devised a way to administer that patch, there isn't any appreciable difference between patching 1,000 or 100,000 personal computers using today's automated tools. In theory, a company could leverage that economy of scale across multiple businesses. In theory, those multiple businesses would benefit from that single company achieving that economy of scale.

In practice, that's exactly what's happening.

IT infrastructure-outsourcing companies are using to their advantage brilliant IT engineers and modern IT automation and management tools and have created state-of-the-art IT management services that are being steadily scaled throughout North America. The success of these companies validates Carr's thesis: IT infrastructure is becoming just another utility for business. And just as it doesn't make any sense for businesses to build, staff and maintain their own electrical generation plants, it doesn't make any sense to build, staff and maintain their own plants to generate datatricity.

IT doesn't really matter, and IT really does matter. F. Scott Fitzgerald wrote, "The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function." As we watch the mentally vapor-locked IT pundits continue to splutter and fume and blast Carr's article, it's painfully clear they are unable to pass Fitzgerald's test.